The Bureau of the Treasury (BTr) increased the amount of auctioned treasury bills for the fourth consecutive week yesterday on the back of consistently strong demand for the short-term IOUs.
The auction was 3.2 times oversubscribed, inducing a flood of total tenders worth P70.6 billion, according to a statement from the BTr.
This prompted the BTr to award P27.6 billion instead of the P22 billion program as it increased the accepted amounts of the three-month and six-month securities.
The 91-, 182-, and 364-day T-bills fetched average rates of 5.101 percent, 5.477 percent and 5.671 percent, respectively.
These were all lower than previous auction rates of 5.113 percent for the 91-day paper, 5.488 percent for the 182-day IOU and 5.724 percent for the 364-day security.
The current auction rates also fell below the prevailing secondary market rates of 5.279 percent, 5.522 percent and 5.712 percent for the three-month, six-month and one-year tenors, respectively.
Chelsea Vanessa Lim, fixed income portfolio manager at Sun Life, told Malaya Business Insight via email yesterday that the odds of another rate cut in February have increased after the announcement last week of a slower than expected fourth quarter 2024 gross domestic product growth rate.
“This has translated to strong flows in the front-end of the curve, including T-bills, leading to lower yields,” Lim said.
In the fourth quarter of 2024 alone, the economy expanded by 5.2 percent, unchanged from the third quarter but slower than the 5.5 percent increase in the same period of the previous year.